OSAGE BEACH — Several top officials at the Columbia City Council’s annual retreat this weekend raised concerns over the creation of transportation development districts to build new roads, furthering the debate over how the city will meet its growing transportation needs.
Most of the city’s major street projects are financed by a quarter-cent capital improvements sales tax, which brings in an estimated $4 million a year. While it seems a foregone conclusion that the council will ask voters this fall to extend that tax for street work, City Manager Ray Beck has already indicated that won’t be enough to keep pace with the city’s growth.
Beck has said the city and Boone County are gearing up to hire a consultant to figure out how to most equitably pay for street projects. In addition to the extended sales tax and the possibility of higher development fees, he listed transportation development districts, or TDDs, as a possible alternative for funding.
The creation of TDDs was authorized by the Missouri Transportation Development District Act passed by the state in 1990. TDDs operate as special taxing districts that issue bonds to generate money for transportation projects. The bonds are then paid off by taxes levied within the geographical boundaries of the district.
Columbia has two TDDs now: one in the Lake of the Woods area and the other at CenterState Crossings near Vandiver Drive and U.S. 63, where developer Curtis McDonald plans a Bass Pro Shops, Hilton Garden Inn and accompanying commercial development.
Elvin Sapp, developer of the recently annexed Philips tract, also has forged an agreement with the city to create a TDD to pay for street improvements in that area of southeast Columbia.
Among the problems with TDDs, according to some city officials, is that they can be created without the city’s approval and that they often involve increases in sales tax.
“TDDs involve land, so the city’s not involved unless city land is involved,” Fourth Ward Councilman Jim Loveless noted. “We’d rather have some say in directing where and when infrastructure construction is done.”
Mayor Darwin Hindman acknowledged that a proliferation of TDDs with higher sales taxes might cause city voters to reject future requests by the city to pass sales taxes for street improvements.
Beck agreed. “It would be hard for us to raise sales tax to pay for our own local roads,” he said. “The sales tax will already be high.”
Similarly, council members worried about the effect TDDs could have on the city’s relationship with the Missouri Department of Transportation. By relying too much on the special taxing districts, the city might create a perception that it needs less state assistance to address its highway shortcomings.
“The concern is that MoDOT sees an alternate funding option,” Loveless said. “If TDDs fund projects here, MoDOT may allocate funds elsewhere.”